The strategy is nothing short of genius – find a high-demand, high dollar consumer electronic product category and profit by selling the low-cost, high-margin accessories that complement the device and make it actually work.

This article explores pushing the boundaries of your own retail comfort level and looking at channels that aren’t necessary alternative, because they are already selling products from your category. I’ve got 2 great examples of retailers in this story – and as the title suggests – they might hold the key to big dollar and lots of leverage in general!

I never pass up a good analogy to help myself understand a complicated story, and spice up a boring one. The growing use of private brands (or private label) by retailers has become the key story of this new era in retail marketing. There are so many different stories and perspectives floating around, I think what gets lost in the buzz is the underlying reason of why retailers have turned to private brands. So what does retailer’s private brand strategy have to do with the NFL?

By Vincent Young Most categories at retail have room for a “good-better-best” stratification of category players. In today’s culture at retail, the retailer is predisposed to seek ownership of the “good” position by introducing an opening price-point category alternative under a private label or house brand. As a result, branded suppliers typically feel compelled to […]

So the rumor is out there – Radio Shack could be on the market, and Best Buy’s name has been tossed out as a suitor – we wanted to share our perspective on what it could mean. Best Buy and other retailers are known to be taking learnings from European Retail and applying them in the US. Best Buy’s own acquisition of Carphone Warehouse in the UK in 2008 could serve as a model for a potential acquisition of Radio Shack. While there are approximately 61 Best Buy Mobile stand alone stores in the US today, there are over 6,000 Radio Shack locations when you combine company owned stores, franchies, and wireless kiosks.

This process has one major flaw if you are a brand whose business case is primarily built on accessing the consumer through the world of retail – the retailer is predisposed to prefer a private label solution …

Finally, here are 3 things brands can do to improve their mobile marketing efforts:

Optimize your brands website for mobile. The goal is to help consumers find info about your products from their mobile phone, without regard for where they actually purchase it.
Improve / increase your presence on your retailers website. If you have a brand showcase on a retailers website, investigate its mobile appearance / functionality.
Optimize search on the retailers website. Yes you have to pay for this. Others are already doing it. It is only going to increase in importance.

SUMMARY:
I don’t know if I’m suggesting something as radical as the authors of the book “Blue Ocean Strategy” would suggest – I’m merely advocating you change the channel by looking beyond your existing business. That being said, pursuing new channels does have some similarities to the core philosophies shared in “Blue Ocean Strategy”. Think about your existing retail channels in context of the Red Ocean Strategy below, and then look at the Blue Ocean Strategy. It makes a Blue Ocean Strategy in retail seem worth a shot.

Key Benefits To Pursuing An “Alternative Channel” Strategy:

1) If you successfully develop new customers, you lessen your dependance on existing customers
2) Experience serves as a “Learning Lab” where you can test new ideas & apply learnings in your existing channels
3) Opportunity to create new demand for your product by positioning it for specific applications / uses
4) Growing sales in new channels may help lesson impact of seasonality in your existing channels
5) Buyers / merchants tend to stay within the retail industry – your new friends may pop up in your existing channels down the road.

2) You exert all this influence to get the product in, but once it’s in, there are results to be measured by. Your opportunities to influence decrease.

3) Buyers are consumers also
I would argue that some merchants even go so far as using exposure or lack of exposure to a particular marketing campaign helps them to justify a decision they made in the past. When the buyer gets exposed to the marketing vehicles regularly in their personal life, this makes them feel that that they might be missing out on if they chose to not assort or promote that particular product. “Am I missing out on an opportunity here?” Or better yet, “is all this marketing going to drive customers to my competitor down the street that is listing that product?” (conversely if they see marketing and earlier chose to promote the product, this probably helps justify their decision).

SUMMARY:
It started with Tivo’s announcement of a marketing partnership with Best Buy last July, and gained steam with Walmart’s recent acquisition of VuDu, and escalates with Tivo’s new big news on March 2nd. The next big battle in Consumer Electronics and TV’s is coming closer.

The reason I share this article with you is that you don’t have to be selling TVs or set top boxes to walk away with ideas that you can apply in your own brand/business.

HOW CAN YOU ADVANTAGE A PARTICULAR RETAILER?

The key lesson here in the pursuit of Retail Leverage is to ask (and answer) the question – “How can I advantage a particular retailer versus their competition?” Get over the battle you are fighting against other brands – THE RETAILER DOESN’T CARE. The real story is the retailers fight against each other.